Home sales rising, but prices lag

Central Ohio's home sales are off to the races, but prices are still hanging around the starting gate.

Jim Weiker, The Columbus Dispatch

Central Ohio’s home sales are off to the races, but prices are still hanging around the starting gate.

In April, 2,390 central Ohio homes changed hands, topping the previous record of 2,286 set in April 2004 during the housing market’s boom years.

April’s sales were 30 percent higher than a year ago, making it the 16th straight month of sales increases in the Columbus area.

But central Ohio home prices as a whole haven’t grown in three years. Through the first four months of 2013, the median sale price of central Ohio homes was $130,000 — exactly as it was during the first four months of 2010, according to the Columbus Board of Realtors.

April’s median sale price of $137,900 was actually slightly down from a year ago.

Other home-price indexes show a similar pattern.

According to CoreLogic’s Case Shiller Index, the median estimated value of a central Ohio home at the end of 2012 (the most recent period available) was $167,000, above the $162,000 at the end of 2010 but below the $178,000 peak in 2005.

While the area overall is stuck in 2010, parts of central Ohio have shown consistent gains in the past few years.

The median sale price in Upper Arlington, for example, is $292,450 so far this year, up 9.4 percent from last year and up 6.5 percent from 2010.

But even some traditionally healthy markets, such as Bexley and German Village, have struggled to gain traction. Both show a drop in median sale price so far this year compared with last — 9.4 percent in Bexley and 7.4 percent in German Village.

The area’s median sale price is the middle price of all homes sold and not necessarily a reflection of how an individual property will fare.

One reason the median is flat is that fewer high-end homes and newly built homes have been selling.

As those markets recover, so will the median price, said Jim Newton, chief economic adviser at Commerce National Bank in Columbus.The other huge reason: foreclosures and other financially distressed properties.

Almost 40 percent of central Ohio homes sold in the first three months of this year were foreclosures, short sales, bank-owned, or government-owned properties. Those homes sold at a median price of $64,000 — far below the $163,000 that conventional homes commanded.

Not only do those prices drag down the area’s median price, they also drag down the sale prices of nearby homes.

Newton said that once those issues begin to settle, prices will follow.

“This is really the marketplace coming into play,” he said. “Hopefully, this will be a long-lived recovery and we’ll continue to see prices rising.”

Others agree that prices will rise as the market returns to normal.

Columbus Board of Realtors President Chris Pedon described the median price as a “blip” in the market, driven more by the price range of homes that happen to be selling right now and by distressed properties and not a reflection of the value of all central Ohio homes.

“The sooner we can get some of that pent-up foreclosure and short sales out of the way, the sooner we’ll all be recovering in terms of equity and prices,” said Pedon, an HER Realtors agent.

Other housing signs are encouraging. Houses are selling much more quickly than a year ago, in an average of 73 days compared with 93 last April.

In addition, 76 percent of Columbus-area Realtors report an increase in multiple offers, according to the Columbus Board of Realtors.